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Did Outsourcing Lead to Boeing's 787 Problems?

Posted By Jeff Moad, May 28, 2013 at 6:40 PM, in Category: Global Value Networks

A recent Seattle Times article makes the case that delays in Boeing’s Dreamliner program--and specifically the plane's recent battery problems--can be traced back to the company's decision 10 years ago to outsource much of the design, integration, and manufacturing to partners. The company, for example, abandoned its Boeing Commercial Electronics business unit which had taken a lead role in integrating electronic subsystems from various suppliers. Beginning with the 787, the article claims, Boeing relied more on suppliers to do the integration themselves after it stopped investing in internal expertise. The article also asserts that financial considerations, not engineering ones, drove the new business model which emphasized financial risk-sharing among Boeing and its suppliers-turned-partners.

Does Boeing’s experience present any lessons for manufacturers considering what to outsource and what design and production competencies should be considered core?

Written by Jeff Moad

Jeff Moad is Research Director and Executive Editor with the Manufacturing Leadership Community. He also directs the Manufacturing Leadership Awards Program. Follow our LinkedIn Groups: Manufacturing Leadership Council and Manufacturing Leadership Summit


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Using new technology like batteries is tricky and comes with growing pains. Tesla has struggled with bad publicity, and many new planes have had similar new technology issues. Outsourcing wasn't the issue here, just sometimes leading edge technology turns to bleeding edge.
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